Tax exemptions may get review

State Sen. Rodney Ellis, D-Houston, urged the Texas Senate Finance Committee Monday to require the Legislature to periodically review all tax exemptions to determine if there is a good public policy supporting their continuance.

Much as the Sunset Commission reviews the need for state agencies, Ellis’ Commission on Periodic Tax Preference Review would make recommendations to repeal, retain or amend a tax.

“The Texas Tax Code contains several preferential tax breaks that were inserted into the code in the distant past, but live on” long after the initial rationale, Ellis said. He equated the breaks with “unjustified spending programs.”

“These breaks cost Texas billions of dollars in revenue and may provide no real economic benefit,” Ellis said. “It is long past time to scrub the tax code for all such wasteful provisions.”

Ellis highlighted the “high cost” gas exemption, which he said “gave away $7.4 billion in state revenue from 2004-09 “due to an antiquated definition of “high cost” gas. He also noted that the state gave retailers a tax break of $200 million last year just to pay their taxes on time.

Former Lt. Gov. Bill Hobby testified in favor of Ellis’ bill, which was left pending in committee. But State Sen. Steve Ogden, R-Bryan, the committee’s chairman, said, “I don’t see how anyone can be against this.”